Artificial Intelligence: Real Estate Revolution or Evolution?

As the capabilities of AI agents continue to astonish the world in 2025, AI is becoming increasingly powerful.
 

• AI has enormous potential to reshape real estate, with near and long-term impacts ranging from the emergence of new markets and asset types to innovations in investment and revenue models.
• A rapidly expanding AI ecosystem and its supporting infrastructure will drive demand for real estate in different markets across the globe.
• There are increasing number of AI-powered real estate technology solutions. Organizations will need to consider how they can harness AI strategically and ethically, piloting applications before scaling to deliver value.

AI’s impact in the real estate market

AI sector as real estate occupiers

The real estate industry as AI adopter

With AI, we anticipate a similar five-fold impact in the long run. While it remains to be seen how AI will be applied to specific sectors like healthcare and how much this growth will generate space demand, some influences are already emerging.

1. Geolocation: AI companies and investments have been observed to cluster around established tech markets. Going forward, growth is likely to be concentrated in locations where AI talent is available, namely tech hubs, innovation centers and universities.

2. Altered demand among assets: AI development calls for more and better data centers, energy grids and connectivity infrastructure.

3. New asset and product types: the birth of the ‘real intelligent building’ is imminent. AI-compliant infrastructure will become a default just as internet connections are a default feature of current buildings. AI will also help deliver net-zero buildings with high sustainability performance.

4. Revenue and investment: AI-powered underwriting and processes will enable faster transactions and more efficient understanding of properties and markets, catalyzing investments at a global scale. AI-compliant infrastructure and the ability to plug in multiple systems could also enable the expansion of ‘space as a service’ models and new revenue streams for landlords and developers.

5. Design and space function: AI will allow for experience-driven design and highly customizable environmental settings.

Read more about this topic in JLL’s Future Vision series - Get set for the 5th Industrial Revolution Real estate strategies for an AI-powered world

AI sector as real estate occupiers
 

The growing AI ecosystem will continue to expand in selected tech hubs

Foundation model developers, such as OpenAI, are just the tip of the iceberg when it comes to the AI ecosystem. Companies involved in semiconductor hardware, cloud computing platforms, model hubs and application development all represent a growing occupier segment. The commercial real estate opportunity looks even brighter when considering the additional companies that will emerge as pre-trained foundation models are modified for specific use cases.

In 2024, private investment in AI within the US alone hit US$109 billion, doubling the amount in 2023. China showed the second largest investment of US $9.3 billion. The AI focus area with the most investment was medical and healthcare; followed by data management, processing and cloud computing; and Fintech. Additionally, enterprise use cases for generative AI represent a substantial opportunity. The GDP related to AI is anticipated to grow with a 18.6% compound annual growth rate (CAGR) through 2030 (PwC). According to our research, the growth in AI is also translating into increased real estate demand from this sector. In the US alone, AI companies nearly doubled their footprint in just two years, occupying more than 2.04 million square meters. This footprint is expected to grow  to 5.2 million square meters in 2030.
 

37% of AI companies are based in the U.S.

Existing AI companies prefer specific locations. In the U.S., for example, 42% of AI companies are concentrated in the San Francisco Bay Area, followed by Boston, Seattle and New York. AI startup growth is expected to continue to center around these major tech hubs in the near future.
 

U.S. sector distribution of AI company occupied